Managing Your Online Inventory
As recently as a decade ago, the concept of inventory management for many dealers was restricted to the physical lot and maybe the dealership’s Web site. Now, however, as car buyers rely heavily on the Internet to help them research and comparison shop, dealers must push their inventory out not just to their own dealership sites but to multiple third-party online destinations as well in order to be competitive in today’s market.
Of course, pushing inventory out to multiple online destinations presents a unique set of challenges to a dealership’s resources. Accomplishing this task in house will often require a great deal of time, effort and manpower. So, what is the best way to handle online inventory management and how much help does a dealer need? There are no easy answers, and much will depend on the size and resources of the dealership, as well as the level of control the dealer wants and/or is able to maintain when it comes to online inventory.
To get some perspective on the matter, Auto Dealer Monthly talked to personnel from several dealerships that are currently using varying degrees of outsourced help to manage online inventory. No approach was exactly the same, from taking vehicle photos all the way to pricing and pushing out, and there were certainly differing opinions as to how much or how little should be handled by a third party. Most everyone could agree, however, that the task of managing online inventory is a formidable one.
Why Outsource?
Time management was an issue of online inventory management that once plagued Reneé Vargas, business development manager for Holloway Motorcars of Manchester, a Mercedes-Benz franchise dealership in Manchester, N.H. When she started there four years ago, the online inventory management duties were handled entirely in-house. The process of manually updating the dealership’s own Web site as well as third party sites like AutoTrader.com and cars.com quickly became “quite cumbersome,” she said.
“When it comes to online inventory management, there are many different places that you can list your vehicles and you don’t want to have to make the same change five times … on one car on all of these different sites,” she stated. Vargas has been with Auction123 for about two years now. “The great thing about using an inventory hub solution – that’s what I call it – is that you make your changes in one place and that gets duplicated for every place that your vehicle is listed.” Deciding to outsource, she said, “came down to a time management issue.”
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"I think that our [Internet managers] benefit from being able to take the photos ... Ultimately, [they] are the ones fielding all the leads and responding ... and they're very familiar with the vehicles because they physically took the pictures and can speak to customers about the specifics of each of those cars."Don Bannister, BDC manager for Hoyte Dodge in Sherman, Texas, agreed. “Just to sign on and change 10 or 15 prices for AutoTrader.com would take you 15, 20 minutes,” he said. “If you can centralize your data to one push agent … it takes so much work out of it.”
Neil Gale, business development director for West County Nissan in Ellisville, Mo., said, “The problem arises … when you have too many vendors and you have to do everything as onesies; it is a nightmare ... you put one car here, then you’ve got to go here and put another. The redundancy would actually kill a dealership.”
One of the challenges of posting inventory to multiple sites is the ongoing struggle with different site requirements. Each listing or auction site has its own preferred method and format for uploading data and photos. Gale explained, “There is an issue with different sites wanting the photos named in different schemes … some want stock number, some want VIN number, some want other types of information [or] they want them numbered differently.”
Vargas added that for “something as simple as uploading photos, I would take the pictures of the cars myself then download into my computer, have to name them for AutoTrader and then have to rename them for cars.com … Administratively, it was becoming more and more cumbersome to be able to meet the demands of each individual site.”
Bannister said he decided to outsource “when it became apparent that no one site was the same.” Access to the DMS was also an issue. “All the sites had different requirements to sign on, like one needed a VPN, one needed a dialup; the access to our DMS was so varied based on the technical level of that site.” He added, “We didn’t want to have 14 different people signing into our DMS … It was much easier to lock on with one provider to pull the information and then they push it out from their servers so the access is minimal to our DMS.” Bannister said Hoyte Dodge has been working with Liquid Motors for their online inventory management for about three years.
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"Unless somebody can focus 100 percent of their time [on taking photos and pushing vehicle vehicle listings out to multiple destinations], it turns out to be a colossal failture."Ensuring consistency across multiple platforms is a big incentive for outsourcing online inventory management through a single provider rather than pushing inventory out manually to multiple sites. Having one hub for managing online listings means the dealership never has to worry that a customer will see conflicting information on the same vehicle listed on different sites. This is especially important when it comes to pricing vehicles.
Bannister noted that this consistency is important not only for establishing trust with new customers, but also when working their existing customer database. Every customer they contact will touch a inventory listing somewhere. He explained. “When we contact them, they go immediately not to our front door but to the Internet … They’re not going to come kick the tires; they’re going to take the time to look at our inventory and compare it [online]. We’ve presented our product accordingly across the board with a consistent pricing matrix and description and video, so no matter where they go to look for us or see us, they’re going to see the same thing.”
Varying Degrees of Outsourcing
Many of the online listing vendors also provide photography and data-gathering services as well, if dealers want to take advantage of that. Naturally, there were varying opinions on utilizing such services. Some dealers are content to outsource most of the duties necessary to put together and post an online inventory listing, while others want to stay more hands-on. There are benefits to each approach.
Gale set up West County Nissan with Dealer Specialties in December of 2009. Prior to that time, vehicle photos were taken in-house and online inventory listings were pushed out to multiple destinations through their Web site provider. “Unless somebody can focus 100 percent of their time doing that, it turns out to be a colossal failure,” said Gale, who spent several years consulting dealerships on BDC and Internet department set ups before going back to work at the dealership.
His primary concern was the quality of vehicle photos being produced. In his experience, some dealerships handling their own vehicle photography often produce poor-quality photos “because they’re not photo experts and they don’t know how to produce the photography that’s going to lead to people clicking on the car for more information.” He believes opting for a service like Dealer Specialties yields better quality photos.
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"[On all inventory listings] you want good photos ... a good seller's description. I think the whole thing is important ... Some people say price or photos [are the most important part of a listing], but I think it all plays together. I think you don't want to take shortcuts on any of it if you can help it." On the other hand, there’s Shane Terrell, Internet manager at Phil Bachman Toyota in Johnson City, Tenn. His situation was the opposite: the dealership but wanted to reduce costs by outsourcing less. “We’ve moved into trying to do as much of it as possible on our own,” he stated. Utilizing a building next door that already belonged to the dealership, they set up their own staging area for vehicle photos and then enlisted AutoRevo to help with both their dealership Web site and pushing inventory to cars.com and AutoTrader.com.
Cost was a consideration, but certainly not the only consideration. Having a stake in the outcome means he cares about the kind of job that’s being done. “I just think the key in doing it yourself is you care about it,” he said. “If I take the photos and I’m the one selling the car, then I’m more likely going to do as good a job as possible.”
Smith spoke about an additional benefit of handling vehicle photography in-house at Laurel’s dealerships. “I think that our people benefit from being able to take the photos themselves, to become familiar with the inventory,” he stated. “Ultimately, the Internet managers are the ones fielding all the leads and responding … and they’re very familiar with the vehicles because they physically took the pictures and can speak to customers about the specifics of each of those cars.”
Brenda Archuletta, Webmaster for David Self Ford Lincoln Mercury in Orange, Texas, is quite content to have an outside company, CDMdata, handle vehicle photos, but when it comes to other aspects of managing her online inventory, she prefers a hands-on approach. One area she insists upon handling personally is writing the vehicle description.
“I’m very particular, and I want the customers to realize exactly what this vehicle’s about,” she stated. “All the companies use a VIN decoder in one way or another … but it’s not 100 percent,” she explained, adding that she recently checked a competitor’s Web site that utilizes VIN decoding and the features listed by the decoder reflected that the vehicle had a 5-speed manual transmission while the added details on the car noted an automatic transmission. “That can really sell or not sell a vehicle,” she pointed out, “so I’m really picky about that ...We could set it up so that it’s all automated, but I choose not to.” However, she acknowledged, it’s “very time-consuming” to write the vehicle descriptions.
Vargas was also in favor of handling vehicle descriptions in-house. “I strongly feel that something as important as the story of the car should definitely be kept in-house because, after all, it’s our car. I think it’s a great feature that [companies] offer the assistance, but … we’re the ones who touch the cars, we’re the ones who look at them, drive them and know what they are.”
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"The great thing about using an inventory hub solution - that's what I call it - is that you make your changes in one place and that gets duplicated for every place that your vehicle is listed."Gale said that while Dealer Specialties has VIN decoding capability, the company enters the dealership’s vehicle data by hand. He said he is able to easily add options through the back-end tool; however, he said the Dealer Specialties team knows to highlight features like DVD or stereo controls on the steering wheel, which he said are the kinds of features that will catch the eye of a potential buyer. “The VIN number breaks out in most of the other vendors’ programs, so it’s the same stuff for every car,” he explained. “[Customers] want to know about the sunroof and the fancy extras.”
Smith stated, “I think a very short and sweet, very vehicle-specific body of text is important … I think you can have a lot of embedded text about a vehicle – features, specifications, horsepower ratings, the amount of cubic volume of the trunk space – and I don’t think those things are as important to the customer upon their first look at the listing, although those are typically things that populate when there’s VIN explosion
Bannister said they do all vehicle descriptions in one location via Liquid Motors using templates to help make the listings specific to each vehicle. “We add on based on what that unit is—non-smoker, one-owner, etc. You can just click and it automatically pastes inside the description.”
Choosing a Solution
Which vendor a dealer partners with to manage online inventory is going to depend on how much control a dealer wants to maintain and how much they are willing to spend on the services they wish to outsource. A number of providers offer varying levels of service to fit a number of preferences, from a basic eBay or craigslist listing tool to full-service photography and data collection and uploading.
Vargas felt that a hybrid approach was best. “I think the more hands-on a dealer is, the more control they have over their online inventory.” She saw no advantages to managing online inventory entirely in-house, unless “you want to list [vehicles] just on your Web site or if you just want to be your local, small used-car dealership, but … not if you want to be a key player on the Internet.” She continued, “For any new car franchise, I would strongly suggest getting a third-party provider that can help you get your inventory in front of the people that you want to see it.”
When it was time to choose a partner to help list their inventory online, Vargas said she spoke to several Mercedes-Benz dealers, one of whom recommended Auction123. After looking at several other companies, she “very comfortably” settled on Auction123 because they offered specific tools that would help her “tap into the craigslist and eBay market.”
Bannister’s reasoning for going with Liquid Motors about three years ago was very similar. The dealership was utilizing another vendor to push inventory out to a number of destinations, but he said Liquid Motors offered the flexibility to push to eBay and a few free sites that were on the dealership’s wish list at the time and which their then-provider couldn’t offer. He noted that they had also experienced some problems with their old provider pushing to AutoTrader.com.
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"I'm very particular [about a vehicle's description], and I want the customers to realize exactly what this vehicle's about ... That can really sell or not sell a vehicle ... so I'm really picky about that ... We could set it up so that it's all automated, but I choose not to."Archuletta said eBay listing capability is what prompted her store to enlist the services of Dealermade a little over a year ago. She said what she was looking for in a provider was “someone to help me do the things I didn’t know how to do. The whole eBay thing was a brand new ballgame [for me].”
Vargas echoed some of those same words while elaborating on their first forays into eBay and craigslist. “When you go into the back end of either of those sites, obviously they’re completely different and not geared toward an auto dealer like cars.com or AutoTrader, so it was a whole new ballgame,” she said. “When I saw that they offered an interface where I could manage my inventory and manage my craigslist and eBay listings right from one place, it really just gave me that one-stop shop that I needed.”
Bannister estimated that 95 percent of the online management duties are handled by Liquid Motors. The five percent that falls primarily to the dealership is related to craigslist. The site changed its requirements and now he must log into the site from the dealership and push listings manually. However, he said, their provider adapted and came up with a solution to make the task less daunting. “When craigslist went to live-person pushing, then Liquid Motors turned around and set up the programming to where everything was in a pop-up window and we could just cut and paste [from inventory information within Liquid Motors to the back-end of the craigslist site].”
Regardless of which company a dealership uses to push inventory to online destinations, the important thing is that the dealership gets its inventory out to more than its own site. “When I started, we were getting about 15 to 20 e-mails a month and maybe 30 to 40 calls from Internet listings with one site,” said Bannister. Now, he sees about 175 e-mails and 425 calls per month, and sales from Internet listings have skyrocketed from just three or so per month to well over 80.
Vol. 7, Issue 8
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